Bernard Winograd, who helped devise Taubman REIT IPO, dies at 63

Bernard Winograd, a retired Prudential Financial Inc. executive who earlier helped devise the initial public offering for Bloomfield Hills-based luxury-mall developer Taubman Centers Inc. in 1992, a milestone in the growth of real estate investment trusts, has died. He was 63.

He died on March 1 at California Pacific Medical Center in San Francisco, said his brother, Morley Winograd. The cause was pancreatic cancer. He and his wife, Carol, were residents of Glen Arbor, Mich., and also had apartments in Manhattan and San Francisco.

His career in finance included positions at the U.S. Treasury Department as executive assistant to W. Michael Blumenthal, who was Treasury secretary under President Jimmy Carter, and treasurer of Bendix Corp. under CEO William Agee. He was president of Taubman Investment Co. from 1983 to 1992, then spent four years as executive vice president and CFO of Taubman Centers, the company founded by A. Alfred Taubman in 1950.

In the early 1990s, a moribund period for commercial real estate, Winograd helped Taubman Centers become the first umbrella partnership REIT, or UPREIT, to go public. Others followed.

“In many ways the UPREIT set the stage for everything that is the REIT industry today,” Winograd recalled, according to a story in the November-December issue of REIT magazine, a publication of the National Association of Real Estate Investment Trusts.

‘Turbocharging’ REITs

The article quotes Sam Zell, the billionaire chairman of Equity Group Investments, as saying, “I think the UPREIT was instrumental in turbocharging the whole industry and its ability to equitize accordingly.”

Taubman Centers, needing capital to expand two of its malls, found bankers reluctant to lend to commercial real estate companies following the savings and loan crisis of the 1980s, according to the article.

Bankers at Morgan Stanley came up with the idea for the company to sell shares to the public -- a step that normally would trigger large capital-gains tax bills for property owners and limited partners -- through what became the UPREIT: a new umbrella partnership, called Taubman Realty Group LP, that took over Taubman’s ownership stake in shopping centers, including the Mall at Short Hills in New Jersey and Beverly Center in Los Angeles.

Hellish IPO

Winograd recalled the groundbreaking deal as the “IPO from hell,” the article reported, because Taubman executives had to explain a first-of-its-kind corporate structure to would-be investors.

“There has never been a REIT like this,” the Washington Post quoted Winograd as saying in August 1992. “For the first time, the public has an opportunity to participate in the kind of quality shopping malls previously available only to institutional investors.”

The IPO, on Nov. 19, 1992, culminated two years of work and raised about $295 million. The cash went to pension funds at General Motors Corp. and American Telephone & Telegraph Co., which had loaned Taubman Centers $610 million in 1985.

Other companies that followed the Taubman lead and went public soon after included Simon Property Group Inc., Tanger Factory Outlet Centers Inc. and Vornado Realty Trust.

Capital solution

“One of the real drawbacks of the real estate industry was that it was very hard to grow by acquisitions,” Winograd said, according to REIT magazine. “You had to use cash or debt to buy things. One of the principal concerns that I had in mind was that when this is over, we want a vehicle where we can buy someone’s real estate from them and use equity. We got that.”

Bernard Bruce Winograd was born on Dec. 31, 1950, in Detroit, the last of three children of Daniel Winograd and the former Lillian Walder. His father ran the Danby’s, a chain of seven men’s clothing stores in Detroit.

After skipping fifth and 12th grades, he attended the University of Chicago, graduating in 1970, at 19, with a bachelor’s degree in social sciences.

He went to work as a political organizer on Chicago’s South Side, opposing the administration of Mayor Richard J. Daley, and then returned to Michigan to lead the Oakland County Democratic Party, according to Morley Winograd, who was chairman of the Michigan Democratic Party from 1973 to 1979.

Treasury Department

He worked for Blumenthal, then CEO of Southfield-based Bendix Corp., as he considered, and ultimately declined, a run for U.S. Senate. When Carter tapped Blumenthal as Treasury secretary, Winograd went to Washington with him.

After his stint at Treasury, Winograd returned to Bendix, where he was treasurer during the company’s attempted takeover of Martin Marietta Corp. The bid backfired, resulting in the 1982 acquisition of Bendix by Allied Corp.

In 2002 he became president of Prudential Investment Management and chairman of Prudential Real Estate Investors, newly created positions. At the time, Prudential Investment Management oversaw about $299 billion of Prudential Financial’s $388 billion of assets under management.

He was named executive vice president and chief operating officer of all of Prudential’s U.S. businesses in 2008 and retired three years later, at 61.

“Bernard always lived his life ahead of the life cycle course,” his brother said.

The advocacy group Patriotic Millionaires, which calls for higher taxes on wealthy people like themselves, listed Winograd as a member.

He met his wife, the former Carol Snodgrass, when she worked for his brother as spokesman for Michigan’s Democratic Party. She survives him, as do their two children, Simon and Christina.